The closure of an internationally renowned independent school on the basis of an "incompetent... biased and illogical" inspection report would be an act of vandalism, the high court heard yesterday.

Zoe Readhead, the proprietor and headteacher of Summerhill, a progressive boarding school where attendance at lessons is optional, is appealing against a notice of complaint issued by David Blunkett, the education secretary, after an Ofsted inspection team found that the school was failing to maintain proper standards.

The inspectors complained that accommodation at the school in Leiston, Suffolk, was inadequate and that efficient and suitable instruction was not being provided.

Summerhill was founded in 1922 by AS Neill, Ms Readhead's father, to allow children to "develop free from fear". Pupils decide which lessons to attend, school rules are democratically decided at meetings with staff and no dossiers on pupils' progress are kept.

Geoffrey Robertson QC, acting for Ms Readhead, told the independent schools tribunal, sitting at the high court, that far from being an ailing establishment Summerhill was "a great school" and the victim of an Ofsted campaign to close it.

"Our evidence in this appeal is that Neill's legacy is a living one; that the system he devised to nurture humanity in children so that they fulfil their real potential in adult life works as well as it ever did, and is for some children the best education they could possibly have," he said.

"It is necessary that it should flourish as an alternative to state and independent systems which have not found a way of combating racism and bullying and sexual abuse, which are straitjacketed by a narrow curriculum and undermined by large classes.

"In any intelligent education system Summerhill would be viewed as a precious resource. Sadly, Ofsted's inspectors have demonstrated ignorance, a lack of professionalism, and even... a degree of persecution in the demands they have made on Summerhill."

All 59 pupils, aged between six and 16, as well as the dozen staff who run the school, were in court to hear the opening statements.

Mr Robertson told the tribunal that the school had been inspected nine times in 10 years, and that despite receiving "a clean bill of health" in 1998 had been visited by seven inspectors the following year, leading to the critical report which prompted Mr Blunkett's notice of complaint.

The inspectors, he said, were preoccupied with the lack of attendance in class, and did not look at the learning that went on in the evenings and at weekends, where children voluntarily took up music, sport and reading.

Only once in a decade did an inspector attempt to find out what children did instead of attend class, and no mention was made of the fact that teacher-pupil ratios seldom exceeded one to five, Mr Robertson told the tribunal.

Alison Foster, counsel for Mr Blunkett, said the secretary of state did not wish to see the school close.

"He is not intent on enforcing compulsory lessons on Summerhill pupils nor on compelling the abandonment of the general philosophy of education propounded by AS Neill," she said.

Mr Blunkett had said that Summerhill should change consistent with its ethos, and had emphasised the need for the school to make lessons attractive to encourage attendance without compelling it, Miss Foster said.

Mr Robertson, however, said that such a stance was "intellectually dishonest" and that to compromise the freedom unique to Summerhill was tantamount to closing the school.

"It's freedom or nothing. If it's not freedom, it isn't Summerhill. If you insist that it is negotiable, that will be the end of Summerhill."

He added that of 110 former pupils questioned, only two said they were dissatisfied with the education they received, and that the vast majority of former pupils went on to successful careers.

"The only significant occupations which are not represented, and this may be to the school's credit, are politicians and school inspectors," he said.

In a significant climbdown, Mr Blunkett withdrew from his complaint a demand that the school's toilets be labelled for the use of staff, boys or girls. They will remain unisex.